Question

Should any of these ratios or the change in a ratio warrant concern for the managers of Tyler Toys or the​ shareholders? ​(Select the best​ response.) A. The company has a very good turnover of assets and collects its receivables​ quickly; thus there are no real concerns from these ratios. B. The company has a very good turnover of assets and collects its receivables​ quickly; thus there are major concerns from these ratios. C. The company has a very poor turnover of assets and collects its receivables​ quickly; thus there are some concerns from these ratios. D. The company has a very good turnover of assets but collects its receivables​ slowly; thus there are some real concerns from these ratios.

Answer 1

Answer:

C. The company has a very poor turnover of assets and collects its receivables​ quickly; thus there are some concerns from these ratios. D

Explanation:

Let's be mindful that turnover here refers to revenue, while receivables​  refer to amounts owed to the company.  So, If the company has a very poor turnover of assets it means it isn't making much revenue, and it is collecting its receivables​ quickly implying there are some concerns (imbalances) from these ratios.

Therefore, the managers of Tyler Toys or the​ shareholders need to work out a solution.